Correlation Between SECURITAS and Polyplex (Thailand)

Can any of the company-specific risk be diversified away by investing in both SECURITAS and Polyplex (Thailand) at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining SECURITAS and Polyplex (Thailand) into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SECURITAS B and Polyplex Public, you can compare the effects of market volatilities on SECURITAS and Polyplex (Thailand) and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in SECURITAS with a short position of Polyplex (Thailand). Check out your portfolio center. Please also check ongoing floating volatility patterns of SECURITAS and Polyplex (Thailand).

Diversification Opportunities for SECURITAS and Polyplex (Thailand)

-0.6

Correlation Coefficient

SECURITAS  Polyplex (Thailand)

Excellent diversification

The 3 months correlation between SECURITAS and Polyplex is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding SECURITAS B and Polyplex Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polyplex (Thailand) and SECURITAS is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on SECURITAS B are associated (or correlated) with Polyplex (Thailand). Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polyplex (Thailand) has no effect on the direction of SECURITAS i.e., SECURITAS and Polyplex (Thailand) go up and down completely randomly.

Pair Corralation between SECURITAS and Polyplex (Thailand)

Assuming the 90 days trading horizon SECURITAS B is expected to generate 0.65 times more return on investment than Polyplex (Thailand). However, SECURITAS B is 1.54 times less risky than Polyplex (Thailand). It trades about 0.13 of its potential returns per unit of risk. Polyplex Public is currently generating about -0.04 per unit of risk. If you would invest  1,203  in SECURITAS B on December 25, 2024 and sell it today you would earn a total of  122.00  from holding SECURITAS B or generate 10.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

SECURITAS B   vs.  Polyplex Public

SECURITAS B

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SECURITAS B are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, SECURITAS may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Polyplex (Thailand)

Risk-Adjusted Performance

Very Weak

Over the last 90 days Polyplex Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Polyplex (Thailand) is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with SECURITAS and Polyplex (Thailand)

The main advantage of trading using opposite SECURITAS and Polyplex (Thailand) positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SECURITAS position performs unexpectedly, Polyplex (Thailand) can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Polyplex (Thailand) will offset losses from the drop in Polyplex (Thailand)'s long position.

The idea behind SECURITAS B and Polyplex Public pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.